There’s no doubt that your 20’s is a very important phase of your life. There’s an anxious but gratifying sensation about becoming an adult, leaving home, and being financially self-reliant. Regardless of whether you launched a career, a university degree, or spent time traveling in foreign countries and gaining life experience, your 20’s is a crucial decade from both a personal and financial context. Whatever path you choose, the one constant that will always remain in your life is money.
The reality of the matter is, the earlier you begin saving money and building wealth, the better your financial scenario will be in the upcoming years. Regardless of whether you wish to get married, start a family, or buy a property, there are particular financial aspirations that every individual in their 20’s should endeavour to reach in order to secure a better a future. In this article, we’ll be taking a closer look at these objectives and how you can begin constructing healthy financial habits.
Make a budget
Developing healthy financial habits begins with discovering how to budget. Being able to spend less money than you earn is the key to saving money, so start taking control of your money by forming a budget and following it! With a paper and pen, list your monthly income and costs. Investigate your expenses to see which can be reduced, or which can be removed entirely. Some ways to cut your expenditures are electing to eat at home as opposed to eating in restaurants and transferring your Cable television subscription to streaming services like Netflix instead.
Remove your debts
Whether or not you’ve travelled the globe or have student loan debts, the quicker you repay these debts, the better. Interest compounds as time passes, so paying off your debts by slashing spendings or working a second job can save you thousands of dollars in only a few years. These savings can then be invested in a high-interest term deposit for example, which will place you in a far better financial position than simply making the minimum monthly repayments on your debts.
Build an emergency fund
Life almost never works out the way you planned, so it is very important to be prepared for any unanticipated changes that might be necessitated. You could find yourself out of a job, or in an incident that prevents you from working, so having an emergency fund will be able to give you some breathing room when you need it the most. Financial experts strongly recommend that all people should have a dedicated emergency fund that can support their living expenses for three to six months.
Insurance protects you financially from any undesirable consequences, for example income insurance in case you lose your job, medical insurance for unanticipated medical expenses, and vehicle insurance in the event that your car is stolen. While it’s not always appropriate to get every kind of insurance available, it’s definitely a wise idea to analyse your individual situation to see which is best suited to you. For instance, health insurance is highly recommended for everybody due to the inflated costs of uninsured medical treatment. Without insurance, an unplanned incident may result in substantial damage to your financial position.
Invest in a diversified portfolio
If you’ve been able to save a specific amount of money that is otherwise sitting idle in the bank, think about investing this money in a high-interest term deposit. Once you’ve got more money saved, think about purchasing some property, or investing in gold. The key to a good investment portfolio is ‘diversification’, meaning that you manage the risks of investment by putting your eggs in different baskets, so to say.
Seek financial help as soon as possible
If, for whatever reason, you’ve ended up in financial hardship, the best advice is to seek financial assistance immediately. Lots of folks wrestle with financial issues for years before finding help, which puts them in a worse position as their debts will only compound with time. The sooner you seek financial assistance, the more options are available to you, so if you need any support with your financial condition, get in contact with the professionals at Bankruptcy Experts Emerald on 1300 795 575, or visit our website for further information: www.bankruptcyexpertsemerald.com.au